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Last Updated: Thursday, 1 July, 2004, 10:39 GMT 11:39 UK
United Airlines increases fares
United Airlines aircraft in new livery
United is urgently seeking extra cash
Bankrupt United Airlines has increased some of its fares by 5% after a surge in crude oil prices raised fuel costs.

The move comes days after the company lost its bid for a $1.1bn (�606m; 905m euro) US government handout.

Following the refusal, United Airlines said it would seek private cash to help it exit bankruptcy protection.

The industry has suffered in recent years as the war in Iraq, the Sars virus, slower global growth and fears of terrorist attack hurt demand.

Club class

United Airlines' decision comes after other airlines - including British Airways, Qantas, Air New Zealand and Malaysia Airlines - have imposed fuel levies.

The rises will affect the cost of most tickets for United flights leaving the US for international destinations.

Escalating fuel prices are a growing concern throughout the airline industry
John Tague, United Airlines executive vice-president

Last month, the International Air Travel Association's chief Giovanni Bisignani warned that high fuel costs could push the industry into the red yet again.

The airline industry is not the only sector to feel the pinch. Travel company Thomas Cook has imposed a �5-a-head fee on new holiday bookings.

Crude prices have cooled from their record level of $42 a barrel that was reached in May, helped lower by higher supplies from Opec nations.

The rhetoric of the market also has calmed, with fewer analysts predicting the doomsday scenario that barrel prices are heading towards the $100 mark.

Even so, with prices at about $34-36 a barrel they still remain high enough to dent profitability.

"We must take the necessary steps to manage our exposure to this unprecedented rise in expense," said John Tague, a vice-president at United Airlines.

"Escalating fuel prices are a growing concern throughout the airline industry."


SEE ALSO:
United Airlines loan plea fails
28 Jun 04  |  Business
United Airlines in new loan plea
23 Jun 04  |  Business
Thomas Cook imposes �5 fuel levy
04 Jun 04  |  Business
Malaysia Airlines adds fuel levy
31 May 04  |  Business
Fuel surcharge introduced at SAA
13 May 04  |  Business
Oil price rises hit airline fares
12 May 04  |  Business


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